Tax Depreciation Limit for Motor Vehicles

Tax Depreciation Limit for Motor Vehicles used for business – For tax purposes there is an upper limit for the maximum depreciation claim you are allowed being $59,136 for the Financial Year 2020-21. This means that if you bought a Ferrari for $400,000, you can only claim $59,136 as a tax deduction. The deduction also has to be apportioned for business usage.

This limit applies to the ATO’s definition of a Motor Vehicle. So if you are purchasing a utility vehicle such as a Ute or Truck, this depreciation limit does not apply.

Before purchasing a vehicle, it would be best to consult your accountant to make sure issues such as GST & Fringe Benefits Tax have been considered.

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